You plug a phone line into the back of the unit. I have no clue why they give you a discount for it..I thought it was a requirement. Basically if you order any pay-per-view service/movie it needs that to send the information to the unit. Also..what I find handy is that it displays the number of the person who is calling on your tv when the phone rings. There have been a few occasions where I've just said..ok..that's a telemarketer..don't bother interrupting my show for that! hehe :)